Category Archives: trade

Opposition to open borders and failed neo-liberal policies that transferred wealth to the private sector and cut funding public services, fuelled the Brexit result, Donald Trump’s election and the continued rise of Marine Le Pen in the French polls. Colin Hines, in a letter to the Financial Times, said that these trends all point to the conclusion that the future will be one of protectionism, asking “The question is, what kind?” His answer:

“President Trump is a 1930s-style one-sided protectionist. He wants to curb imports that cause domestic unemployment, but at the same time plans to use “all possible leverage” to open up foreign markets to US exports”.

To avoid a re-run of the 1930s, when the US and others took a similar approach, Hines advocates a very different kind of “progressive protectionism” – one that can benefit all countries by nurturing and rebuilding local economies, reducing the level of international movement of goods, money and services. Policies geared to achieving more job security, a decrease in inequality, and protection of the environment globally would be championed.

Shadow Chancellor: a focus on developing strong local economies

Sienna Rodgers reports that the shadow chancellor is in Preston today, a city whose ‘co-operative council’ has taken an innovative approach to funding in the face of swingeing budget cuts (see Localise West Midlands). In his speech McDonnell will champion “creative solutions” for local authorities suffering under austerity, from bringing services back in house to setting up energy companies, with a focus on developing strong local economies.

Such economic action, many believe, must be accompanied by a profound change in our foreign/defence policy

A serious commitment is required to averting armed conflict, wherever tensions rise, by diplomacy, mediation and negotiation, redirecting the wealth currently used to subsidise the arms industry and to prepare for aggressive military action. This has also long been advocated by John McDonnell (see Ministry for Peace, archived).

These are the policies of Jeremy Corbyn, who has made peace and disarmament his major international priorities. He has already appointed MP Fabian Hamilton as shadow minister for ‘peace and disarmament’, with a brief to ‘reduce violence, war and conflict’, participating in multilateral disarmament meetings at the UN in New York.

Mr Hamilton, who will prioritise reducing supplies of guns and other weapons worldwide, said that Labour is strongly committed to helping to reduce the violence, war and conflict in the world which destroys so many innocent lives every day and – many would add – cripples the economies of many regions, forcing their citizens to emigrate to find peace and to make a living.

Rupert Read, Chair of the Green Housethinktank, described Colin Hines’ new book as a ‘feisty clarion call’ to greens and ‘the Left’ – and, we add, small ‘c’ conservatives.

It calls for a change of direction: away from acquiescence in the trade treaties which shaped the deregulated world that spawned the financial crisis — and toward protection of nature, workers, localities and national sovereignty, as the key locale where democracy might resist rootless international capital.

Progressive protectionism’ is completely unlike the ‘protectionism’ of the 1930s, that sought to protect one’s own economy while undermining others; this by contrast is an internationalist protectionism, aimed, “at reducing permanently the amount of international trade”, and making countries around the world more self-reliant/resilient. ‘

Read believes that too many ‘progressives’ have sleepwalked into tacitly pro-globalisation positions incompatible with protecting what we most care about.

And partly because of this, a new political power is rising that threatens to trash the future: The Brexit vote and (in particular) the election of Donald Trump have restored the word ‘protectionism’ to the popular political vocabulary.

Hines argues that we need totake back protectionism from the Right. He means that only policies of progressive protectionism can make real the idea of “taking back control”. Read thinks that’s right. If we embrace progressive protectionism, we’ve something better to offer the voting public than they have.

The chapter on ‘free movement’ will be the most controversial of all. Hines (Ed: rightly) points out that countries such as Romania and the Philippines are being stripped bare of their medical personnel, and argues that no decent internationalist can support this sucking out of ‘the brightest and the best’ from their home countries.

We can take control of the agenda, rationally and seek to minimise such movement; for example by helping to make conditions better in home countries, tackling dangerous climate change, stopping foreign wars of aggression, encouraging ‘Site Here to Sell Here’ policies everywhere, and bringing back capital controls which helped the world prosper safely from 1947 till 1971 (and which certain countries, such as Iceland, have already brought back).

Capital controls are crucial, because they stop the threat of relocation which multinationals have used to ‘discipline’ democracies for too many years now (Ed: and capital can then be reinvested in the communities from which that capital was accrued).

Hines argues that the Treaty of Rome needs transforming into a ‘Treaty of Home’ that will allow peoples to protect what they hold dear – and Read thinks politicians on the Continent need to read his book if they are to prevent further exits, starting possibly with France. Read ends:

“This book is a necessary read. Perfect it ain’t; it’s slightly repetitive, and there are problems of substance too: most Resurgence readers will (rightly) dislike how soft Hines is on economic-growthism, and will wish that he were readier to embrace the post-growth future that is demanded by the acceptance that we are already breaching the limits to growth.

“But if there is to be a future, then progressive protectionism will surely be part of it. This book is crucial thought-leadership for us, away from the political dead-end of globalisationist fantasy, and toward a localisation that can transform the debate – and then the world”.

The BBC and other media outlets report the views of Patrick Minford, Professor of Applied Economics at Cardiff Business School, Cardiff University.

In his report From Project Fear to Project Prosperity, to be published in the autumn, he predicts that a ‘hard’ Brexit will offer a ‘£135bn annual boost’ to economy – around a 7% increase in GDP.

Minford, lead author of the introductory nine page reportfrom Economists for Free Trade says that eliminating tariffs, either within free trade deals or unilaterally, would deliver trade gains worth £80bn a year. He has expressed the view that the British economy is flexible enough to cope with Brexit. The four elements in his calculation are listed in the Guardian as:

free trade, either via free trade agreements with the EU and the rest of the world, or if those are sticky via unilateral moves to remove our trade barriers

the cost to the taxpayer of the subsidy paid to unskilled EU immigrants, which we estimate at £3,500 per adult.

MEP Molly Scott Cato (left, speaking in the European Parliament), who read Philosophy, Politics and Economics at Oxford, giving up her professorial chair at the University of Roehampton after election, says that Patrick Minford’s modelling is based on the UK unilaterally removing all restrictions and tariffs and trying its luck in a global market. According to LSE economists who have analysed his work, this would mean a massive fall in wages and the “elimination” of UK manufacturing.

Minford views the EU as a costly protectionist club, but in reality, Scott Cato continues, the single market eases internal trade and reduces costs: “In the real world, proximity, common standards, and rapid movement of components matter, hence the importance of the customs union. UK manufacturing is largely foreign-owned and revolves around assembly of components manufactured elsewhere in the EU. Ironically, this makes it even more important that we stay in the customs union, to ease the passage of components across borders”. She ends:

“Minford’s work is indicative of the whole Brexit project: based on the illusion that the UK has some manifest destiny that allows us to stand alone in a globalised world. It is high time this phony economics was sent into retirement”.

Dr Christine Parkinson’s recently published booksets out the following series of measures which could move us towards a new, balanced, green economy:

introducing greater incentive schemes to encourage businesses to develop, use and market greener technologies and to penalise those who don’t. Examples of this could include: using and developing renewable forms of energy; phasing out motor vehicles which use petrol or diesel and introducing those that run on easily-accessible clean energy;

investing in research institutions which have the ability to develop innovative solutions to today’s climate-change problems;

introducing legislation to reduce the use of the motor car, such as restricting the number of cars owned by each household, unless they run on clean energy;

introducing a carbon tax on those companies who continue to use fossil fuels;

rebalancing the economy, so that the rich are not rewarded for irresponsible behaviour that adds to the carbon load;

setting targets for meaningful reductions in carbon emissions by an early date, as suggested by Desmond Tutu in his petition (chapter 1) and ensuring that the calculations for this are correct;

phasing out nuclear power and nuclear weapons worldwide and re-channelling the money saved into the incentive-schemes and investments mentioned above;

proper funding of those institutions regulating the tax system, so that tax evasion and avoidance is properly penalised;

shifting the tax system to penalise those activities which need to be discouraged, such as greenhouse gas emissions and the accumulation of wealth;

banning certain household appliances and gadgets, which are not necessary and only add to the carbon load;

establishing a new institution, which will monitor the use of fossil fuels by companies and promote, and provide support for, the use of greener forms of energy;

encouraging less air travel, by raising awareness about the damage this is doing to the planet and encouraging airlines to invest instead in technologies that do not damage the planet;

working globally with other partners to reduce deforestation;

re-balancing international trading systems, so that goods and animals are not transported unnecessarily across continents and seas, adding to the carbon load;

encouraging countries worldwide to be self-sufficient in terms of goods and resources, so that goods are not imported which can be produced internally;

re-thinking and re-balancing entirely transnational trading systems;

working globally to find a better means of international co-operation in working jointly to reduce and reverse that damage that is currently being done to the planet;

encouraging partnerships between local government and local cooperatives and social enterprises;

encouraging the setting up of local groups (3G groups), where individuals can meet together to share what they are doing to reduce their carbon emissions and to encourage each other to keep going with it, even if the majority of others are still in denial (3G stands for three generations – the amount of time we have left).

She continues: “Some of the ideas above are already being worked on, and others are not about changing the economic system but about reducing carbon emissions, but I hope these are a starting point for others to add to, if we are really serious about taking meaningful anti-climate-change measures before it is too late”.

*

“Three generations Left” can be ordered direct from the publishers, using this link.Whilst much of the book is viewable on this website, she would prefer you to buy a copy as any profits from the sale of this book will be used to fund her son’s work amongst slum children in Uganda. Last year was a difficult one for this project (Chrysalis Youth Empowerment Network), as due to the devaluation of the pound post-Brexit, monies sent from the UK to Uganda had lost a fifth of their value. Contact: ChristineEP21@gmail.com.

Although it regrets our leaving the EU and wishes we wouldn’t, the report is written as an alternative approach assuming we are outside the EU.

Its Executive Summary states: “This report puts on to the political agenda an option for Brexit which goes with the grain of widespread worries about globalisation, and argues for greater local, regional, and national self-sufficiency, reducing international trade and boosting import substitution”.

Hines continues: “As I am aware it is the first time a report from a politician isn’t clamouring to retain membership of the open border Single Market”

It details the need for an environmentally sustainable future involving constraints to trade and the rebuilding of local economies. Indeed the report actually calls for ‘Progressive Protectionism’ rather than a race to the bottom relationship with the EU – see page14:

Reducing dependence on international trade implies reducing both imports and exports. It is therefore very different from the traditional protectionism of seeking to limit imports whilst expanding exports. It should therefore meet with less hostility from other countries, as it has a very different aim from simply improving the UK’s balance of payments. It could be described as ‘progressive protectionism’, or ‘green protectionism’. X1V reference adds: ‘For detailed proposals on how this could and should be done, see http://progressiveprotectionism.com/wordpress/’

Also ground-breaking in Green Party literature of late is its discussion of the arguments for and against managed migration.

Its sensitive handling of this contentious issue for many in the Greens does mark an important step forward and hopefully will help to start an internal debate about whether or not the party should reconsider its open borders approach.

This recent Daily Telegraph article with Iain Duncan Smith and Nigel Lawson frothing to get rid of key environmental regulations shows how impossible any green future will be under a hard Brexit.

Hines feels that we won’t leave the EU and central to that happening will be a realisation across Europe that to see off the extreme right they must manage internal migration and protect domestic jobs. At that point the reasons for supporting Brexit for most are no longer valid.

He ends: “This timely report makes a crucial input to this debate, one that will rage for the next two years”.

In her recently published book, Dr Christine Parkinson sets out a series of measures which could move us towards a new, balanced, green economy:

introducing greater incentive schemes to encourage businesses to develop, use and market greener technologies and to penalise those who don’t. Examples of this could include: using and developing renewable forms of energy; phasing out motor vehicles which use petrol or diesel and introducing those that run on easily-accessible clean energy;

investing in research institutions which have the ability to develop innovative solutions to today’s climate-change problems;

introducing legislation to reduce the use of the motor car, such as restricting the number of cars owned by each household, unless they run on clean energy;

introducing a carbon tax on those companies who continue to use fossil fuels;

rebalancing the economy, so that the rich are not rewarded for irresponsible behaviour that adds to the carbon load;

setting targets for meaningful reductions in carbon emissions by an early date, as suggested by Desmond Tutu in his petition (chapter 1) and ensuring that the calculations for this are correct;

phasing out nuclear power and nuclear weapons worldwide and re-channelling the money saved into the incentive-schemes and investments mentioned above;

proper funding of those institutions regulating the tax system, so that tax evasion and avoidance is properly penalised;

shifting the tax system to penalise those activities which need to be discouraged, such as greenhouse gas emissions and the accumulation of wealth;

banning certain household appliances and gadgets, which are not necessary and only add to the carbon load;

establishing a new institution, which will monitor the use of fossil fuels by companies and promote, and provide support for, the use of greener forms of energy;

encouraging less air travel, by raising awareness about the damage this is doing to the planet and encouraging airlines to invest instead in technologies that do not damage the planet;

working globally with other partners to reduce deforestation;

re-balancing international trading systems, so that goods and animals are not transported unnecessarily across continents and seas, adding to the carbon load;

encouraging countries worldwide to be self-sufficient in terms of goods and resources, so that goods are not imported which can be produced internally;

re-thinking and re-balancing entirely transnational trading systems;

working globally to find a better means of international co-operation in working jointly to reduce and reverse that damage that is currently being done to the planet;

encouraging partnerships between local government and local cooperatives and social enterprises;

encouraging the setting up of local groups (3G groups), where individuals can meet together to share what they are doing to reduce their carbon emissions and to encourage each other to keep going with it, even if the majority of others are still in denial (3G stands for three generations – the amount of time we have left).

She continues: “Some of the ideas above are already being worked on, and others are not about changing the economic system but about reducing carbon emissions, but I hope these are a starting point for others to add to, if we are really serious about taking meaningful anti-climate-change measures before it is too late”.

Whilst much of the book is viewable on this website, she would prefer you to buy a copy as any profits from the sale of this book will be used to fund her son’s work amongst slum children in Uganda. Last year was a difficult one for this project (Chrysalis Youth Empowerment Network), as due to the devaluation of the pound post-Brexit, monies sent from the UK to Uganda had lost a fifth of their value.

There was widespread media coverageof American president elect Donald Trump’s appearance at the Carrier furnace factory in Indianapolis, marking a deal to stop the company from moving hundreds of jobs to Mexico and threatening “consequences” for companies that relocate offshore. He also exerted pressure on Ford who backtracked on opening another small plant in Mexico.

Whilst understanding the welcome for more local jobs, Margaret – at a recent meeting of theWest Midlands New Economics Group(WMNEG) – wondered if any deeper thinking would take place, “Or will Ford continue to make the ‘gas-guzzlers’ which are damaging the health of human beings and the planet?” Ann asked if there were different forms of protectionism and has decided to look further.

Colin Hinespresents a detailed alternative – ‘progressive protectionism’ – which will be the focus of a future WMNEG meeting. As he wrote in the Guardian:

There is a left, green alternative that could effectively challenge the rise of the extreme right, while giving voters hope for a better future. In my new book ‘Progressive Protectionism: Taking Back Control’, I detail why progressives should endorse the controlling of borders to people, capital, goods and services, but not as occurred in the 1930s, when governments attempted to protect domestic jobs while still wanting to compete and export globally at the expense of others.

Progressive Protectionism, by contrast, aims to nurture and rebuild local economies in a way that permanently reduces the amount of international trade in goods, money and services and enables nation states to control the level of migration that their citizens desire . . . championing policies geared to achieving more job security, a decrease in inequality and protection of the environment worldwide.

Hines would urge Jeremy Corbyn to use his undoubted popularity with European socialist leaders, at next month’s London meeting of European socialist parties, to discuss how all EU member states can cooperate to reverse the present political, social and economic instability that haunts the whole continent.

He calls for a beneficial treaty replacing the outdated, discredited Treaty of Rome, which is increasing economic insecurity through austerity, relocation of businesses and the rapid migration of workers: “This should prioritise the protection and rebuilding of local economies and so provide a positive answer to voters’ concerns. To achieve this, a debate needs to be started about why Europe needs a progressive protectionism to replace the increasingly discredited Treaty of Rome with a Treaty of Home Europe-wide”. Cross-border issues such as responding to non-European migration, climate change, pollution, crime and military security would still of course require intra-European cooperation”.

He will be speaking on this theme at various events, including one meeting on 22nd April in Birmingham

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Colin Hines is the convener of the Green New Deal group and for ten years, co-ordinator of Greenpeace International’s Economics Unit. His latest book, ‘Progressive Protectionism‘, was published in January 2017. It details why and how groups of regional nation states and their communities should join together to reintroduce border controls to protect and diversify their economies, provide a sense of security for their people and prevent further deterioration of the environment. He is also author of ‘Localization – A Global Manifesto‘. This may be bought in hard copy or read on computer/Kindle via the Amazon website. Those who avoid Amazon may like to read the assessment of corporate tax avoidance by lawyer Marc Wadsworth, here.